House Democrats used a letter from regulators last week to make their case that Congress need not get involved in reforming the Community Reinvestment Act.

The letter, sent Jan. 3 by the four bank and thrift agencies, said that recently revised CRA rules - which began phasing in Jan. 1 - will reduce regulatory burden on banks, making legislation unnecessary.

Under the new rules, examiners will look at loans actually made, creating a more "constructive, credible, efficient, and unobtrusive" review process, the agencies wrote. The regulators were answering six questions posed by House Democrats last December regarding the implementation of CRA.

"This letter cries to the Republican majority to give CRA a chance," said Rep. Henry B. Gonzalez, the ranking Democrat on the banking committee. "Anything less is unjust and mean-spirited."

Lawmakers also were warned that a provision in the regulatory relief bill would prevent regulators from collecting information on small-business loans from banks with more than $250 million in assets. The agencies said they could not effectively judge a bank's performance without the data.

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